Precious metals to keep shine

Precious metals could lose some steam in the near term, but they are “bound to rebound" and have raised their price forecasts over the longer term, according to HSBC.

The global research team has lifted its price forecasts for gold, silver and the platinum group of metals on the belief that the bull markets remain “essentially intact".

HSBC’s gold price forecast for 2012 was lifted to $US1500 an ounce from $US1300 an ounce, while its long-term, five-year forecast is now $US1250 an ounce, up from $US1050 an ounce. Its 2013 forecast is $US1450 an ounce.

Gold was fetching about $US1522 in Asian trading yesterday. on Wednesday.

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HSBC’s price forecast for the white metal is $US29 an ounce in 2012 and $US20 an ounce on a five-year outlook, up from $US20 and $US15 respectively.

“Although silver is priced closer to its equilibrium value, its near-term bias is upward in our view."

Referring to silver, Macquarie analyst Hayden Atkins has examined when to catch the falling knife.

Mr Atkins said Chinese demand has not driven the huge price volatility over the past month. He said the narrowing premium between the LBMA and the China price would be a welcome development in a falling market, in that it could induce interest out of China. However, the two prices are not quite correlated.

Macquarie remains cautious on the metal’s outlook and is yet to find a compelling reason to believe silver is out of the woods.

Mr Steel said that for PGMs, widespread belief that Russian stockpiles are near exhaustion has supported palladium prices.

The global bank forecasts a 2012 palladium price of $US750 an ounce and a five-year price of $US700 an ounce. For platinum, it is $US1750 an ounce and $US1625 an ounce respectively. HSBC also introduced a forecast of $US1650 for 2013.

Separately, Merrill Lynch notes that Japanese reactor capacity factors will bounce back in 2012 and forecasts a rebound in the uranium price.

“We view that spot uranium has bottomed and will strengthen from current levels," analyst Glen Chipman said.